DEFENSE LOGISTICS AGENCY

 HEADQUARTERS

 8725 JOHN J. KINGMAN ROAD

 FORT BELVOIR, VIRGINIA 22060-6221

January 30, 2017

MEMORANDUM FOR SUPPLY DISCREPANCY REPORT (SDR) AND FINANCE 

PROCESS REVIEW COMMITTEE (PRC) MEMBERS

SUBJECT: Approved Defense Logistics Management Standards (DLMS) Change (ADC) 

1203, Supply Discrepancy Report (SDR) Procedures for Packaging Discrepancies 

at Foreign Military Sales (FMS) Freight Forwarder or Component Retail/Tactical 

Level Activities including Estimated/Actual Repackaging Cost

(SDR/Supply/Finance)

The attached change to DLM 4000.25, Defense Logistics Management Standards (DLMS), is 

approved for implementation. Code value updates must be implemented jointly on March 1, 2017. 

Phased and staggered implementation is authorized for all other changes. Specific target 

implementation dates are identified in the attachment. The updated DLMS Implementation 

Conventions (IC) will be posted to the Enterprise Business Process Standards Office Web at 

www.dlmso.dla.mil/elibrary/TransFormats/140_997.asp, within 10 days from the above date.

Addressees may direct questions to DLMSSDR@dla.mil, Ms. Ellen Hilert, DOD SDR 

System Administrator, e-mail: ellen.hilert@dla.mil; or Mr. Ben Breen, SDR Alternate, e-mail 

benjamin.breen@dla.mil. All others must contact their Component designated Supply PRC 

representative or SDR PRC representative available at: 

www.dlmso.dla.mil/eLibrary/ServicePoints/allpoc.asp.

 

 

HEIDI M. DAVEREDE

Program Manager

Enterprise Business Process 

Standards Office

Attachment

As stated

cc: 

ODASD (SCI/TP)

Supply PRC (Primary/Alternate)

USTRANSCOM
Attachment, ADC 1203

Page 1

Attachment to ADC 1203

Supply Discrepancy Report (SDR) Procedures for Packaging Discrepancies at 

FMS Freight Forwarder or Component Retail/Tactical Level Activities

Including Estimated/Actual Repackaging Cost

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION: Ellen Hilert, DOD 

SDR System Administrator, and Ben Breen, SDR Alternate, Enterprise Business Process 

Standards Office, e-mail: DLMSSDR@dla.mil

2. FUNCTIONAL AREA:

a. Primary Functional Area: Supply/SDR

b. Secondary Functional Process: Finance

3. REFERENCES:

a. Defense Logistics Management Standards (DLMS) Manual, DLM 4000.25, Volume 

2, Chapter 17, Supply Discrepancy Reporting and Volume 4, Chapter 2, Billing Procedures

b. Defense Transportation Regulation (DTR) Part II, Cargo Movement, Appendix E

c. Defense Security Cooperation Agency (DSCA) Manual 5105.38-M available via 

DSCA's E-Security Assistance Management Manual (SAMM)

4. APPROVED CHANGE(S): Substantive revision subsequent to staffing are highlighted in 

green. 

a. Brief Overview of Change: This change documents procedures for processing 

DLMS SDRs submitted for reimbursement of repackaging costs. These procedures are primarily 

applicable to (a) FMS shipments frustrated at the freight forwarder facility due to packaging and 

documentation discrepancies and (b) retail/tactical activity discrepant receipts where repackaging 

is required prior to storage or distribution.

b. Background:

(1) SDRs Submitted for Reimbursement of Repackaging Costs. DLMS 

procedures for SDRs delineate how SDRs are used to document repackaging costs at the 

wholesale level, and to request disposition for discrepant receipts where repackaging costs 

exceed the distribution center dollar threshold for automatic repackaging. However, DLMS SDR 

procedures do not clearly document the business rules to submit SDRs for reimbursement of 

repackaging costs when the discrepant materiel has been received by a Service retail/tactical 

activity or is frustrated at a freight forwarder supporting a Security Assistance (SA) customer. 

The Services identified a need to clarify these procedures to ensure customers obtain appropriate 

financial compensation when errors in packaging occur and repackaging is required for proper 

transportation or storage. 
Attachment, ADC 1203

Page 2

(2) DTR Guidance. DTR Part II, Cargo Movement, Appendix E, Section H.6 

(Reference 3.b.) states: 

“6. HAZMAT Certifications. DOD/USG origin shipping activities must certify FMS 

HAZMAT shipments for overseas movement. This is required whether shipments are 

exported via the DTS or by FMS purchasers/Freight Forwarders. Freight forwarders cannot 

violate the integrity of any SU, including SCP shipments. If they receive SUs certified only 

according to 49CFR, they must hire a certified commercial packer to unpack, repack and 

then certify the SU according to international regulations (International Air Transport 

Association [IATA]/International Civil Aviation Organization [ICAO] or International 

Maritime Dangerous Goods). The bill for this service is passed to the FMS purchaser who, in 

turn, will make a claim against DOD for reimbursement via the SDR process. If an NOA is 

for HAZMAT, the NOA response will tell the shipping activity whether the cargo will move 

overseas by air or surface so it can be certified accordingly. DOD policy states that all 

HAZMAT certifications may be done on continuation pages of BLs. A NOA addressee 

cannot demand any kind of special form that is not required under DOD regulations. DOD 

regulations will determine which form will be used for a HAZMAT certification.)”

Staffing Note: Refer to paragraph 10.e(2) for DLMS Program Office recommended 

revisions to the DTR guidance.

(3) Current DTR guidance specifically directs the FMS purchaser to submit 

SDRs for reimbursement of repackaging costs after repackaging by a certified packer for

improperly packed hazardous materiel. This guidance conflicts with the SDR process which is 

designed to allow the Component or DLA Distribution to provide disposition instructions to 

resolve a reported discrepancy. Submission of the SDR prior to repackaging permits action 

activities to determine the most appropriate resolution, which may be different than the approach 

authorized by the DTR. Action activities have the option to authorize (a) disposal with 

reshipment or credit/re-requisitioning, (b) return with reshipment or credit/re-requisitioning, or 

(c) other manner of resolution that is either convenient or cost effective for the Government. For 

example, when the materiel is shipped directly to the freight forwarder under a DOD contract, 

the contracting office may coordinate for the contractor to take corrective action.

c. Approved Change in Detail:

(1) Ensure that SDR applications submitting SDRs requesting credit for 

repackaging allow the user to populate the existing SDR data element for repacking cost. 

Component SDR applications supporting action activities must recognize and provide visibility 

of this information. This is an existing data element in SDR transactions, but may not be fully 

implemented within all systems. Refer to Enclosure 3.

(2) Adopt new systemic capability to distinguish estimated versus actual 

repackaging costs using a new estimated/actual cost flag in the SDR transaction. Systems must 

retain visibility of both when both are provided. Action activity systems should be designed to 

allow users to properly identify repackaging cost (as estimated or final) based upon the 

submitter’s remarks text (pending DOD-wide implementation of the new cost flag).

(3) Ensure that SDR applications submitting SA SDRs allow users to populate

the DLMS 842A/W SDR data element with the materiel location. Component SDR applications 

supporting action activities must recognize and provide visibility of this information. This is an 
Attachment, ADC 1203

Page 3

existing data element in SDR transactions that was updated to identify specific encoded values 

for different types of locations; it is not widely implemented. WebSDR will reject entries that do 

not contain valid code values (as established for DLMS use). Refer to Enclosure 3.

(4) Update DLMS procedures to provide more specific guidance for SDR 

submission and processing, and reimbursement under MILSBILLS. Note that repackaging by 

the freight forwarder or a third party contracted by the freight forward is an optional approach for 

resolution of the packaging discrepancy. The customer may request alternative action by the 

item manager. Refer to Enclosure 1.

(a) Packaging or documentation discrepancies that result in a frustrated 

shipment at the FMS freight forwarder location may be submitted regardless of dollar value. 

Reimbursement for repackaging of FMS materiel cannot exceed the value of the materiel;

therefore, an estimated cost for repackaging of low dollar shipments (below $200) should not be 

obtained from a third party without prior approval. 

(b) The SDR should normally be submitted for disposition prior to 

performing repackaging regardless of the dollar value; however, if there is an exception due to 

circumstances (such as leakage) requiring immediate attention, this must be reflected in the SDR 

remarks and supporting documentation. If the estimate provided on the initial SDR submission 

differs from the actual cost, the submitter should provide a correction to their SDR submission to 

alert the owner/manager to provide a corrected reimbursement amount.

(c) If materiel cannot be returned to the shipper in its current condition 

without incurring repackaging costs, this should be stated in the submitter’s remarks.

(d) The submitter remarks must clarify whether the packaging cost 

provided is estimated or actual (remarks will be required until the new estimated/actual cost flag 

is fully implemented).

(e) In addition to actual repackaging cost reimbursement, Components 

must provide reimbursement to the FMS customer when a third party is employed to determine 

estimated repackaging costs. The invoice for this charge must be submitted as an SDR 

attachment. 

(5) Establish new Reply Code 109 to distinguish credit provided for repackaging. 

Use of this new code is applicable to discrepancies requiring repackaging only. SDRs requiring 

both materiel reimbursement and repackaging (e.g., for a directed return shipment) may continue 

to document disposition using Reply Code 101.

d. Revisions to DLM 4000.25 Manuals:

(1) Revise DLM 4000.25, Volume 2, Chapter 17, Supply Discrepancy Reporting

and Volume 4, Chapter 2, Billing Procedures, as shown in Enclosure 1.

(2) Revise DLM 4000.25, Volume 2, Appendix 7.28, Supply Discrepancy Report 

Relevant Data Elements to adjust the explanation for existing SDR reply codes as shown in 

Enclosure 2 and add the new Reply Codes 109 and 919.
Attachment, ADC 1203

Page 4

(3) Update DLMS Implementation Convention (IC) 842A/W Standard SDR, 

Follow-up, Correction, Cancellation, & Reconsideration Request and 842A/R SDR Reply as

shown in Enclosure 3.

e. Transaction Flow: Standard SDR transaction flows apply. Refer to Enclosure 4 for 

typical sequence of SDR transactions for scenarios identified in this change.

f. Alternatives: SDR procedures support use of narrative text to identified estimated 

versus actual cost pending implementation of the new estimated/actual cost flag.

5. REASON FOR CHANGES: These changes document SDR procedures to clarify and 

improve transactional interfaces to ensure timely and appropriate handling of SDRs related to 

reimbursement of repackaging costs.

6. ADVANTAGES AND DISADVANTAGES:

a. Advantages: Clarifies procedures and data content for submission and processing of 

SDRs. Supports capability to identify both estimated and actual cost systemically. This 

becomes most significant when both are provided by allowing for comparison should there be a 

significant difference in cost.

b. Disadvantages: None noted.

7. ADDITIONAL FUNCTIONAL REQUIREMENTS: These procedures require the 

owner/manager to provide reimbursement for repackaging based upon a validated SDR. 

MILSBILLS procedures support this requirement via DLMS 810L Logistics Bill for Accessorial 

and Other Miscellaneous Billings (Legacy Document Identifier Code (DIC) FN2/GN2). 

MILSBILLS guidance is updated to specifically address this requirement at Enclosure 1. 

Pending implementation of this functionality for miscellaneous billings, Components may use 

existing MILSBILLS reimbursement procedures (as applicable to materiel).

8. ESTIMATED TIME LINE/IMPLEMENTATION TARGET:

a. Reply code updates will be effective for all trading partners 30 days from publication 

of the approved change.

b. Component SDR systems are authorized staggered implementation for data element 

enhancements for SA materiel location, repackaging cost, and estimated/actual cost flag with a 

target implementation not later than July 2017. Pending implementation, relevant information 

should be included in remarks text.

c. WebSDR transaction, input screen, and all relevant displays will have a target 

implementation date of six months from publication of the ADC. (Additional time will be 

allotted if it is not feasible to update the management report functionality within 6 months.)

d. Procedures for providing estimated and actual values (so identified using remarks 

text) and procedures for sequencing SDR submissions as outlined (original SDR, interim reply 
Attachment, ADC 1203

Page 5

from the action activity, and SDR correction) for Security Assistance frustrated shipments, are 

authorized for use upon approval of this change.

e. Components requiring systemic updates to adopt MILSBILLS functionality for 

packaging reimbursement using the DLMS 810L Logistics Bill for Accessorial and Other 

Miscellaneous Billings (Legacy DIC FN2/GN2) must implement for DLMS compliance by 

2019. 

9. ESTIMATED SAVINGS/COST AVOIDANCE ASSOCIATED WITH 

IMPLEMENTATION OF THIS CHANGE: Not available.

10. IMPACT:

a. New DLMS Data Elements: Establish a new data element in Logistics Data 

Resource Management System (LOGDRMS) as follows:

Estimated/Actual Cost Flag. This is a one position indicator used in conjunction with a 

dollar amount to distinguish between estimated and actual values.

A Actual 

E Estimated

b. Changes to DLMS Data Elements:

(1) Revise data element “Location of Discrepant Security Assistance Materiel” to 

include code values as shown in Enclosure 3.

(2) Revise SDR reply code explanations and establish new Reply Code 109 as 

shown in Enclosure 2.

c. Automated Information Systems (AIS):

(1) Component SDR systems must be upgraded to transmit or recognize (as 

applicable) the data content specified in this change: repackaging cost, estimated/actual cost 

flag, and location of discrepant Security Assistance materiel. Systems must not overlay 

estimated repackaging cost with the actual repackaging cost when both are provided.

(2) This change places an emphasis on supporting documentation to include 

photographs and invoices for repackaging costs. Component systems that have not yet 

implemented DLMS functionality to support incoming or outgoing attachments are asked to 

consider adopting this functionality for DLMS compliance and to reduce potential for dual 

system processing using the WebSDR attachment function (for input or view only).

d. Defense Automatic Addressing System:

(1) Revise reply code explanations and add new Reply Codes 109 and 919, and 

text as shown in Enclosure 2.

(2) DOD WebSDR transactions and direct Web input must be updated to 
Attachment, ADC 1203

Page 6

accommodate the new estimated/actual cost flag.

(3) DOD WebSDR must be upgraded to allow direct input of the location of 

discrepant SA materiel to support SA SDRs. Enhancements will be needed to recognize the code 

list adopted under this change, and display them using the clear text name on screens, and in email SDRs. A new edit will be established to ensure only authorized values are submitted.

(4) WebSDR correction screens must be upgraded to allow for inclusion of the 

repackaging cost (for direct web entry, this data element is currently restricted to the original 

SDR input).

(5) This change relies upon previously approved functionality to recognize when 

SDRs have been forwarded, so that corrections (or other submitter-generated transactions) can be 

systemically directed to the correct current action activity.

(6) WebSDR management reports must be updated to display estimated and 

actual repackaging cost when discretely identified by the estimated/actual cost flag. To 

accomplish this, add a new column for “Estimated Repackaging Cost” while retaining the current 

column for Repackaging Cost (which will be used for both actual cost and, pending 

implementation of the new flag, for costs that are undefined). When repackaging cost is

provided on the original SDR without the associated flag, the management report will display the 

repackaging cost in the current column for repackaging cost. If a correction is provided and 

contains a different value for repackaging cost, display the original value in the estimated cost 

column and the corrected value in the repackaging cost column. 

e. Non-DLM 4000.25 Series Publications:

(1) Components must update internal operating procedures and provide training 

for new procedures. Pending implementation of enhanced data content, users should be 

instructed to include relevant information to include repackaging cost, estimated/actual cost flag, 

and location of discrepant SA materiel in SDR remarks.

(2) DSCA apply recommended update to DSCA Manual 5105.38-M, Chapter 6 

comparable to the following. This change is necessary to authorize reimbursement for low dollar 

SDRs reporting a frustrated shipment at the freight forward’s location due discrepant packaging 

or documentation attributed to the shipper. 

C6.4.10.2. Time limits for reporting discrepancies relating to contractor warranties are 

prescribed in the individual warranty clauses and/or contracts. SDRs must be submitted 

by the purchaser within the contractor warranty timeframe, even when the warranty 

timeframe is less than one year after delivery or passage of title to the defense articles or 

less than one year after the scheduled period of performance of the defense service. 

SDRs are processed only when the estimated value is $200 or greater regardless of the 

type of discrepancy except for shipments frustrated at the freight forwarder's location 

due to packaging or documentation discrepancies attributed to the USG or

misdirected or unordered shipments as described in Section C6.4.10.1.1. This minimum 

value includes the value of the item plus any transportation and handling costs. 

Purchasers may submit SDRs regardless of the dollar value so that problems can be 
Attachment, ADC 1203

Page 7

documented, but only those over the minimum dollar value are reviewed for possible 

compensation, except as specifically authorized.

(3) USTRANCOM apply recommended update to the DTR, Part II, Appendix E, 

Section H. comparable to the following. This change is necessary to maintain consistent 

guidance among DOD publications.

“6. HAZMAT Certifications. DOD/USG origin shipping activities must certify FMS 

HAZMAT shipments for overseas movement. This is required whether shipments are 

exported via the DTS or by FMS purchasers/Freight Forwarders. Freight forwarders 

cannot violate the integrity of any SU, including SCP shipments. If they receive SUs 

certified only according to 49CFR, the Freight Forwarder will coordinate with the 

FMS purchaser for submission of an SDR documenting the problem and requesting 

disposition instructions from the responsible DOD Component. Validated SDRs may 

direct return, disposal, repackaging with reimbursement of actual repackaging costs, 

or other action, as deemed appropriate by the item manager. The customer may 

request alternative action by the item manager if the SDR reply does not provide an 

acceptable solution for the customer. The ILCO and source of supply will consider 

the estimated cost for corrective action prior to determining the most appropriate 

approach for resolution. When the estimated cost exceeds the value of the shipment, 

the burden for corrective action must fall on the DOD/USG and must not be 

delegated to the FMS customer/freight forwarder. This will eliminate the potential 

for credit reimbursement for repackaging to exceed the value of the original purchase 

of the materiel. When acceptable to the customer and upon authorization by the DOD 

Component to perform the necessary repackaging, the Freight Forwarder must hire a 

certified commercial packer to unpack, repack, and then certify the SU according to 

international regulations (International Air Transport Association [IATA]/International 

Civil Aviation Organization [ICAO] or International Maritime Dangerous Goods). The 

bill for this service is passed to the FMS purchaser who, in turn, will make a claim 

against DOD for reimbursement via the SDR process in accordance with DLM 

4000.25, Volume 2, Chapter 17, Supply Discrepancy Reporting. If the NOA is for 

HAZMAT, the NOA response will tell the shipping activity whether the cargo will 

move overseas by air or surface so it can be certified accordingly. DOD policy states

that all HAZMAT certifications may be done on continuation pages of BLs. A NOA 

addressee cannot demand any kind of special form that is not required under DOD 

regulations. DOD regulations will determine which form will be used for a HAZMAT 

certification.)”

11. PROPOSED DLMS CHANGE (PDC) 1203 STAFFING RESPONSE/COMMENT 

RESOLUTION: This DLMS Change was coordinated multiple times to incorporate updates 

based upon Component responses. The most recent feedback is shown at the top of each row 

with prior comment history included to provide visibility of concerns and how they were 

addressed.

Originator Response/Comment Disposition

1. DSCA DSCA STR/SPI concurs. Noted.
Attachment, ADC 1203

Page 8

Originator Response/Comment Disposition

2. Army Concur with Security Assistance comment. Noted.

3. Army Security 

Assistance 

(USASAC)

Concur with comment:

USASAC does not support the use of a third-party packer 

because this process places the burden for corrective 

action on customers and their representative. USASAC 

finds the SDR process supporting this approach to 

discrepancy resolution to be cumbersome and inefficient

for reporting the discrepancy, obtaining disposition 

instructions, reporting completion of corrective action, and 

subsequently obtaining reimbursement. However, 

USASAC recognizes that other Components may find the 

use of the third-party packer to be acceptable. USASAC

recommends further update to DTR guidance to clarify 

use of the SDR rather than a Transportation Discrepancy 

Report (TDR) for reporting packaging and documentation 

discrepancies attributed to the shipping activity. 

(November 22, 2016 meeting)

-------

Comment History:

Non-concur with updates posted (draft ADC 1203) 

subsequent to initial review:

The issue of reimbursement has not been rectified. Filing a 

simple SDR for reimbursement is only acceptable if the 

Security Cooperation Customer is willing to pay their FF 

to fix the USG errors. Many SC customers do not want to 

take on that additional financial responsibility.

The USG CANNOT direct the FF to do anything. The FF 

is under contract with the SC customer. How can the USG 

force a commercial entity to fix the USG error?

Shipping hazardous material incorrectly is a violation that 

can levy civil and criminal penalties (49 CFR, Part 107, 

SUBPART D-Enforcement) to those introducing the 

material into the transportation system. The USG needs to 

find other measures to address and remedy future 

occurrences; instead of resting the burden on the FF and 

expecting the SC customer to pay the FF.

The excuse of the vendor sending the material incorrectly; 

seems more of a PWS issue in the statement of work or 

working off a FOB destination contract that is missing the 

DOD intervention as to provide and receive the NOA.

Please Note: I have seen Packaging Service on SDDC 

solicitations that have been paid by the TAC utilizing a 

BOL.

I do concur that the DTR needs to be re-written and 

suggest that DLA take the lead to correct the direction; 

since this is in direct result of a DLA directed change 

without IA concurrence to start with.

DLMS Program Office Summary:

Based on DLA response and existing 

procedures under MILSBILLS, the DLMS 

Program Office cannot accept the Army 

(PDC staffing) recommendation for use of 

the TAC as a reimbursement/payment 

method for repackaging costs. If the Army 

wishes to pursue this approach further, we 

recommend coordination with 

USTRANCOM to modify the DTR to 

include authorization for wider applicability 

of the TAC.

ILCO comments and draft ADC updates 

were reviewed during a joint meeting on 

November 22, 2016. The DLMS Office 

reiterated the procedures for SDR 

processing associated with use of a thirdparty packer are optional and need to be 

coordinated and found to be acceptable to 

all parties (item manager, ILCO, customer)

prior to use. The customer is allowed to ask 

for an alternative solution if the item 

manager proposes use of a third-party 

packer and this is not acceptable to the 

customer. Wording to this effect was added 

to the ADC for both the DLMS manual and 

recommended update to the DTR. 

Additionally, the DLMS Program Office 

agreed to continue discussions with OSD 

SCI/TP to determine if the DTR should be 

further updated to remove potentially 

confusing guidance leading to the 

submission of TDRs (rather than SDRs) for 

packaging discrepancies attributed to the 

shipping activity.

Note that USASAC comments and 

associated responses to comments prior to 

the November meeting are retained in this 

table for reference. 

DLMS Office response to draft ADC 

non-concurrence: The USASAC nonconcurrence is noted and as a result the 

ADC provides additional clarification that 

the procedures associated with the freight 

forward reimbursement under the SDR 

process is not a mandatory approach for 

resolution of packaging discrepancies. The 

customer can request and the item manager 

pursue alternative solutions to the 

discrepancy (return or pick-up of the 
Attachment, ADC 1203

Page 9

Originator Response/Comment Disposition

-------

Initial response: Like the Navy we have no way of 

capturing any type of miscellaneous credits/debits. Our 

system checks against the "discrepant billed value" if the 

incoming credit does not match existing billed value then 

a suspension is created, requiring manual intervention. 

Also Packaging/Repackaging charges can be reimbursed 

thru Transportation Reimbursement process if

required. This also places a potential burden on the FF 

who may or may not have the expertise or a have a 

"certified commercial packer" conveniently located to 

perform these functions. In some cases, as described in 

the PDC, could extend the length of the SDR processing 

timeframe (i.e. the example used: "when the materiel is 

shipped directly to the freight forwarded under a DOD 

contract, the contracting office may coordinate for the 

contractor to take corrective action". Would there be a 

timeframe for this type of coordination, because I could 

see this dragging out. 

The USASAC G4 Logistical Programs Division doesn't 

concur with the subject PDC. 

BLUF: More though and dialogue needs to be done. The 

IA(s) and DSCA need to be brought to the table to assist. 

This PDC is not looking at the full effect of the actions. 

The DFAS reimbursement process could be used to settle 

the issues directly with the FF. This should not be done 

with L009 funds such as (BFMS, BDOD, BIII, RIII, 

BRRR, etc...) Service be that DLA/DCMA/GSA or some 

other DOD shipping activity must provide valid funding 

(TAC or MIPR). The PDC does not correctly identify nor 

remedy the issue in regards to the Certification of 

Hazardous cargo. This type of discrepancy is dual hatted. 

This should be a TDR as well as a SDR. The TDR vehicle 

should be used to make restitution for the services. DLA 

is thinking or expecting countries to pay the FF for 

services;that the USG should have done correctly. The 

stated process in this PDC leaves the FF in the middle; the 

FF has to wait or assume that Host Nation will reimburse 

them for the effort or work. When in fact it is the 

responsibility of the DOD shipping activates to correctly 

certify the hazardous cargo, based on the convenience 

(Ocean or Air) selected by Country and or its FF and 

indicated on the NOA response. Not doing so, is a failure 

for the USG. The process of issuing a NOA and shipping 

only once a response is provided; along with properly 

certifying the hazardous cargo based on the convenience 

requested should be enforced and adhered to. No caveats 

or excuses. Other SITUATIONS and QUESTIONS that 

need to be address: In the event that the material arrives at 

the FF and it is determined that the FF will not agree to 

absorb any additional costs due to the error; how will the 

USG arrange movement back? If it is agreed that disposal 

is necessary: Who will be paying for the handling of 

materiel (dependent up actual type of 

discrepancy), item manager may obtain 

services of a third party, vendor may be 

directed to correct packaging for DVD). 

This was always the intent. The rules are 

provided to allow the transactions to 

contain additional information (estimated 

vs. actual cost) and step-by-step guidance 

for use only when the customer/ILCO 

wants use the process whereby the freight 

forward corrects the packaging (themselves 

or through a third party) for subsequent 

reimbursement via SDR process. The 

Army is not required to use these 

procedures.

The Army suggestion that DLA take the 

lead to correct the DTR is noted, but the

DLMS Program Office has no way to direct 

such an action, and the DLA team has 

already responded that they do not concur 

with the use of the TAC for direct payment 

of repackaging costs. 

If the Army would like to pursue an update 

to the DTR for this particular aspect and 

revisions are approved, we can re-visit the 

DLMS SDR process rules to identify this as 

another alternative.

DLMS Program Office initial response to 

Army comments/non-concurrence: The 

appropriate method for the item manager to 

provide credit for repackaging is to generate

the credit bill using the DLMS 810L 

Logistics Bill (Legacy DIC FN2 

Accessorial and Other Miscellaneous 

Billing (Credit)). Lack of capability to 

provide appropriate credit is considered a 

DLMS compliance gap. The DLMS

Program Office recommends the Army take 

steps to upgrade functionality within Army

systems during modernization. 

The intent of this DLMS Change is to 

provide a means of communication 

supported by automated processing/audit 

history upon identification of the 

discrepancy (with an outline for the 

sequence of steps involved) to ensure that 

the customer is properly reimbursed for 

corrective action taken by the customer (or 

directed by the customer to the freight 

forwarder). No specific resolution 

methodology is required (return/ 

repackage), so the circumstances and 
Attachment, ADC 1203

Page 10

Originator Response/Comment Disposition

NOW Hazardous Waste? This is now outside the scope of 

the shipper and the FF. 

There should be a TAC provided by the Shipper that can 

be used to pay for any services; since it was the shipper 

that created the error. There needs to be a record of the 

requested convenience (i.e. NOA response). If for some 

reason the Country or its FF changes the conveyance after 

the cargo has been shipped; is a much different situation 

and the USG would not be responsible for any of the cost 

for the re-certification of the hazardous cargo.

freight forwarded capabilities must be taken 

into consideration during resolution.

Feedback from AFSAC on Army 

comments:

I was looking at (Navy FMS) and (Army 

FMS) responses on the reimbursement of

the repackaging costs, and discussed it with 

one of our SDR policy folks here. She said 

that the SDR document number/case/line 

cannot be reimbursed for costs in excess of 

the billed value (e.g. materiel damaged at 

freight forwarder--DLA providing credit for 

materiel plus credit for repacking costs to 

return to DLA because freight forwarder 

cannot dispose).

She said while it will work now, when we 

get to case closure ... they are going to have 

out of balances on the case because the 

requisition will have a credit greater than 

the billed value. Then someone working 

financial/case closures is likely to request 

DLA rebill the difference and we will have 

an even bigger mess on our hands.

Question to Navy FMS POC ... You 

mentioned that we should use transportation 

reimbursement process to pay this ... But if 

we pay this through the transportation

reimbursement process (as an actual versus 

a percent of SDR value), then doesn't that 

mean that FMS admin funds are paying for 

all the repackaging costs

caused by DLA error? We have had several 

dozens of these in the past few

months. Thoughts?

Navy FMS Response: Ellen Hilert

explained that the reimbursement costs 

would come from the material billed value, 

this won't cause the case to be out of whack 

when it comes to for closure. 

Yes, you are correct in that if we use the 

transportation reimbursement to credit I was 

merely stating that something similar to the 

SDR transportation reimbursement policy 

should be considered but as mentioned 

above this is a moot point if DLA is going 

to credit against the line billed.

Air Force FMS Feedback: Here is the issue 

... we are seeing situations where DLA 

wants the freight forwarder to return the 

HAZMAT materiel that was damaged 
Attachment, 

ADC 1203

Page 11

Originator Response/Comment Disposition

during packaging. DLA issues credit for the 

materiel value PLUS the cost to repackage 

prior to returning. It is over the original 

billed value on the requisition. 

And we have even had the situation where 

the repackaged for onward shipment

and the cost exceeded the billed value.

DLA feedback on suggested use of a TAC 

for reimbursement of repackaging costs:

DLA Comptroller Representative: From 

a Finance and audit perspective, there are 

few, if any, internal controls when allowing 

a freight forwarder (or anyone) use of a 

TAC. I have reviewed a couple of recent 

transactions that meet the scenario below 

and would not recommend the use. For 

example, the vendor shipped the material to 

the freight forwarder and the material 

needed to be repackaged. DLA had already 

paid the vendor $27 for the material, $78 in 

freight charges, and then credited the 

customer $240 for the repackaging costs.

DLA SDR Representative: Using the 

MILSBILLS transaction would be 

preferable than having the FF send an 

invoice direct to DFAS and being 

reimbursed via a TAC code. However, as 

mentioned, the use of legacy DIC FN2/GN2 

would have to be programmed in EBS and 

the component systems. I do however, like 

the requirement for the FF to provide an 

invoice with the actual packaging cost data.

DLA Transportation Representative: 

The Transportation Account Code (TAC) 

was developed to support the movement of 

cargo/material through the Defense 

Transportation System (DTS) and to pay for 

the "Transportation" cost. 

In accordance with the Defense 

Transportation Regulation (DTR), Part II, 

Appendix V, Par B.4.a., & e. which states: 

The goals of the TAC program are to ensure 

that: a. The valid TACs, individually linked 

to a current funding authorization or LOA, 

are provided for each transportation 

shipment or mode moving within the DTS; 

e. Funds allocation and control procedures 

established under the TAC program 

facilitate implementation of new or long 
Attachment, ADC 1203

Page 12

Originator Response/Comment Disposition

range financial processes or procedures for 

"transportation services". 

Until there is a constructive change to this 

regulation and those of the individual 

services, any perceived work around in my 

opinion violates the intent of the TAC 

process/program.

4. Marine Corps Concur Noted.

5. GSA The National Customer Service Center (NCSC) within 

GSA has reviewed PDC 1203.

Although GSA is not mentioned in PDC 1203 we should 

note that if this were to apply to GSA we do not have the 

IT staffing or funding to make such changes to our Vision 

system. Also, that we would have the same billing issues 

as others have noted. There is currently no policy 

established within GSA that deals with this process. It 

would be interesting to know an estimate of the volume 

and dollar value involved. 

Recommend GSA submit a system change 

request to obtain the necessary functionality 

to provide credit for repackaging/

certification and provide an estimated 

implementation date. The GSA NCSC may 

choose alternative disposition instructions 

(e.g., contractor replacement/pick-up of 

improperly packaged materiel); however, 

alternatives may result in a more costly 

solution to the reported discrepancy.

6. Air Force Concur Noted.

7. Air Force 

Security 

Assistance 

(AFSAC)

Concur with updates posted (draft ADC 1203) subsequent 

to initial review.

-------

Comment History:

Initial response: Concur with one comment:

Request that the revision to Paragraph C17.3.2.8 be 

clarified or parentheses added to provide clarification to 

the following sentence: 

"Repackaging prior to receipt of disposition instructions 

from the action activity is only authorized by exception 

based upon dollar threshold for DLA Distribution Center 

or when operationally ......."

I have reread this and the front part of the existing 

paragraph several times and am still not clear what is 

meant by dollar threshold for DLA Distribution Center ... 

does this mean if cost to repackage is <$100 or value of 

asset is less than $2500, item does not meet criteria for 

reimbursement; thus, customer may go ahead and 

repackage, but are then encouraged to submit an "info 

only" to notify DLA of discrepancy with cost to repackage 

attached. Upon receipt of the SDR, DLA is not required 

to reimburse below $ value, but may do so at their 

discretion. 

IF this is the correct interpretation, recommend something 

be added as to how DLA should respond to these info only 

SDRs. DLA should be required to respond to the SDR 

Noted. Clarification provided. The 

reference to the dollar threshold was for 

discrepancies reported by the DLA 

Distribution Center (the distribution center 

is pre-authorized to correct packaging 

discrepancies by the owning Component 

based upon specified dollar thresholds).

ADC incorporates additional business rules 

for the responsible source of supply to 

consider the estimated cost for corrective 

action prior to determining the most 

appropriate approach for resolution. When 

the estimated cost exceeds the value of the 

shipment, the burden for corrective action 

must fall on the source of supply and must 

not be delegated to the FMS customer/

freight forwarder and third-party packer. 

This will reduce the potential for credit 

reimbursement for packaging to exceed the 

value of the original purchase of the 

materiel.
Attachment, ADC 1203

Page 13

Originator Response/Comment Disposition

with what corrective action has been taken to ensure 

packaging issues for future shipments has been addressed. 

Otherwise, the customer will continue to get improperly 

packaged materiel and have to pay to fix it at their own 

expense. This is an issue we currently have across the 

board with information only SDRs--DLA respond with 

standard 144 reply (Recorded for information only; no 

action taken)--then customer reorders and has same issue 

with shipment on new order.

Some system changes will be required to SDR-A to 

populate the new fields, and to pass the new fields to 

WebSDR. We will begin documentation of the change 

requirements now.

Discussed with supply and financial personnel about the 

issue of credit exceeding materiel value that Army/Navy 

can't currently process, and while Air Force can process 

them right now ... they will likely get reversed during case 

closure as they will be causing out of balances.

8. Navy Initial Response: Navy ERP billing does not support 

Accessorial and Other Miscellaneous Billings. We bill for 

material only. Current ERP design does not create 

outbound FN2 assessorial charge transactions to be 

interfaced to the customer.

Understood that the original bill to the 

customer is for materiel at standard price 

(so it is a comprehensive price), but if credit 

for repackaging alone is needed, the item 

manager would provide only the credit bill 

for the repackaging cost using the DLMS 

810L Logistics Bill (Legacy DIC FN2 

Accessorial and Other Miscellaneous 

Billing (Credit)). Lack of capability to 

provide appropriate credit is considered a 

DLMS compliance gap. The DLMS Office

recommends Navy take corrective action to 

upgrade functionality within Navy ERP.

Pending such an upgrade, this ADC 

authorizes alternative procedures.

9. Navy Security 

Assistance

Concur with updates posted (draft ADC 1203) subsequent 

to initial review.

-------

Comment History:

Initial Response: Normally for FMS any repackaging 

efforts are done by the FMS customer Freight Forwarded 

(FF) and the costs (bill) is paid by the customer to the FF. 

I liken this to the DSCA SDR transportation 

reimbursement situation where we are reimbursing the 

customer for money that did not come out of the FMS 

case.

Yes, agree that the FF will bill the 

customer, but the FMS customer will be 

reimbursed using an SDR when the 

packaging problem was due to the shipper's 

error. The bill from the FF to the customer 

will be used to provide supporting 

documentation of the actual cost for 

repackaging.

10. DLA Concur with updates posted (draft ADC 1203) subsequent 

to initial review.

-------

Comment History:

Initial response: DLA concurs with comment:

Noted.

[Responses inserted below each 

question/comment.]
Attachment, ADC 1203

Page 14

Originator Response/Comment Disposition

1. RE: “The SDR should normally be submitted for 

disposition prior to performing repackaging regardless of 

the dollar value; however if there is an exception due to 

circumstances (such as leakage) requiring immediate 

attention, this must be reflected in the SDR remarks and 

supporting documentation.” 

Question: If this is the case, should we only receive an 

actual cost of repackaging charges?

Response: Yes. When reimbursement is requested after 

corrective action has occurred, the SDR should contain the 

actual cost.

2. Current system limitation do not allow a credit memo 

to be created that would indicate the DIC of FN2/GN2. 

When memo is created, systemically we create the FA2. 

Currently discussing options with J6 Sustainment for a 

work around.

Response: Understood. Program updates can be planned

in response to this ADC. Additional clarification has been 

added to the ADC specifying use of the DLMS 

enhancement capability in the DLMS 810L to indicate 

credit is associated with packaging Lack of capability to 

provide appropriate credit is considered a DLMS 

compliance gap. Pending system upgrade, this ADC 

authorizes alternative procedures.

3. RE: “Procedures for providing estimated and actual 

values (identified within remarks text), inclusive of 

original SDR followed by interim reply and SDR 

correction for Security Assistance frustrated shipments, 

will be effective upon approval based upon of this 

change.”

Question: Please confirm that this is an 11 REPLY and 

not an interim response. EBS current logic does not allow 

for interim reply codes to work on Type 6, 7, W, & V 

SDR’s.

Response: DLA will use an interim Reply Code 104 on a 

SDR reply (Transaction Set Purpose Code 11) to provide 

disposition and direct return of supporting documentation 

for actual cost. Reply Code 104 is an existing code for use 

with customers and is considered an interim reply.

4. RE: “Estimated/Actual Cost Flag. This is a one 

position indicator used in conjunction with a dollar 

amount to distinguish between estimated and actual 

values.”

Question: Should it be required for the submitting 

customer to submit the actual estimate or actual invoice? 

PDC talks about providing the dollar figures, but haven’t 

seen the requirement for AR to provide the proof of work.

Response: ADC has been updated to be more specific. 

We are asking FMS customers to provide fully 

documented repackaging costs including the invoice as 

attachments to the SDR. For U.S. Forces the invoice is 
Attachment, ADC 1203

Page 15

Originator Response/Comment Disposition

not mandatory if the discrepant packaging is validated by 

the shipper, however we are asking for supporting 

documentation when available. All others require 

supporting documentation.

5. RE: “Component SDR systems must be upgraded to 

transmit or recognize (as applicable) the data content 

specified in this change: repackaging cost, 

estimated/actual cost flag...”

Question: If data is not filled in, should SDRs be rejected 

using a rejection code or the 129/104 code?

Response: If the data is not provided (using any 

combination of data fields, remarks, or attachments), 

DLMS Office recommendation is to use the interim Reply 

Code 104 to request additional information rather than 

reject the SDR.

6. RE: “Where encoded information on the SDR is not 

sufficient, the submitter should provide photographs 

(when available) and detailed descriptions of how the 

materiel was packaged, as well as the actual damages 

incurred to the materiel (when applicable).”

Question: For the business process area to make a fair 

decision on repackaging cost, should photographs be 

required to prove the discrepancy. This will also help in 

remedial training, and preventive corrective action in the 

future to avoid these situations.

Response: Reworded to say: “the submitter is strongly 

encouraged to provide photographs and detailed 

descriptions...” We have also highlighted the importance 

of system upgrades for attachment processing. It would 

be premature to make this mandatory (for all users) 

because many of the Component systems do not yet have 

attachment interfaces with WebSDR and submission 

would require swivel chair for input. We will consider 

this for a future enhancement.

7. DLA would like to have a new reply code created for 

credit authorization that deals with repackaging cost. 

Instead of using the current 101 credit authorization, the 

code should be specific to credit for reimbursement due to 

repackaging cost.

The code for repackaging came about from the recent 

FMS SDR's issues where materiel is frustrated at a freight 

forwarder. The additional code would eliminate any 

rejections of reimbursement for the FMS country. 

For EBS, our end users see the 101 credit we 

automatically know that it is for the material. We are 

afraid that if we use the same code for repackaging, it 

could lead to rejections of SDRs and cause numerous 

reconsiderations and contested request if a second credit is 

needed for the

actual materiel in the event it has a discrepancy upon 

receipt at final destination. 
Attachment, ADC 1203

Page 16

Originator Response/Comment Disposition

Response: Concur. Reply Code 109 will be established 

for repackaging reimbursement.

11. USTRANSCOM After review and coordination, USTRANSCOM votes 

approved on the subject PDC.

Noted.
ADC 1203, Enclosure 1

Page 1

Enclosure 1, Defense Logistics Manual (DLM) Chapter Revisions

Changes are identified by bold red italics and strike-though text. Intervening text between 

updated paragraphs is not shown. Paragraph numbering will be updated upon insertion of new 

paragraphs.

A. Revise DLM 4000.25, DLMS, Volume 2, Chapter 17, Supply Discrepancy Reporting, as 

shown. 

C17.3.2.8. Packaging Discrepancies

C17.3.2.8.1. Improper Packaging. Report any unsatisfactory condition 

resulting from improper packaging that causes the item, shipment, or package to be vulnerable to 

any loss, delay, or damage according to the specific conditions cited. Unless otherwise 

indicated, the minimum dollar value reporting criteria is when the estimated/actual cost of 

correction exceeds $100; or the value of the item, shipment, or package is $2500 or over, 

regardless of the estimated or actual cost to correct the packaging discrepancy. This may include 

loss or damage to the item, shipment, or package except when a report is otherwise required by 

DTR 4500.9-R, Defense Transportation Regulation, Part II, Cargo Movement. Where encoded 

information on the SDR is not sufficient, the submitter should is strongly encouraged to provide 

photographs and detailed descriptions of how the materiel was packaged, as well as the actual 

damages incurred to the materiel (when applicable). When requesting disposition instructions,

the submitter should also include, when available, the estimated or actual cost of correction of 

packaging on the initial SDR. Repackaging costs may include total costs to complete packing, 

packaging, preservation, palletization and/or marking (materiel and labor) as appropriate for 

the situation. The submitter must include the actual cost of corrective action when using the 

SDR to document repackaging cost on an SDR provided for reimbursement after corrective 

action has occurred. Repackaging prior to receipt of disposition instructions from the action 

activity is only authorized by exception. DLA Distribution Centers are pre-authorized to 

correct packaging discrepancies by the owning Component based upon a coordinated stock 

readiness agreement specifying the applicable dollar threshold. Customer receiving activities 

may need to take immediate corrective action when operationally necessary (clarify reason in 

SDR remarks and provide supporting documentation). If the estimate provided on the initial 

SDR submission differs from the actual cost, the submitter should provide a correction to their 

SDR submission to alert the item manager for a corrected reimbursement amount. If there is 

a substantial difference between the estimated and actual repackaging cost, the item manager 

will review documentation to ensure the claim is valid and may request clarification for the 

difference. The source of supply will provide credit to customers in accordance with 

MILSBILLS procedures in DLM 4000.25, Volume 4, Finance.

[Intervening text not shown]

C17.3.3.5. Packaging, Documentation, and Other Discrepancies. Prepare the SDR to 

report the discrepancy using Action Code 1H 3B (information only discrepancy reported for 

corrective action and trend analysis) where the receiving activity is able to process the receipt,

and there is no impact to the shipping activity inventory records, and no disposition/resolution is 

required from the item manager. Include repackaging costs when applicable. U.S. Forces 
ADC 1203, Enclosure 1

Page 2

should include supporting documentation for repackaging when available. All others are 

required to provide documentation for repackaging costs,( i.e., an invoice). Follow standard 

SDR distribution rules. The shipping activity will receive the action copy; the ICP will receive 

an information copy. The storage activity receiving the SDR will review the SDR for corrective 

action for future shipments and record the SDR trend analysis. No response is required for 

Action Code 1H 3B SDRs.

[Intervening text not shown]

C17.3.20.2.1. SDR transactions must contain valid values as appropriate to the 

transaction purpose: discrepancy code, action code, and reply code. Reject with 

Disposition/Status Code (Reply) Code 915, 916, or 927. When populated, the materiel location 

on Security Assistance SDRs must contain a valid code (Reply Code 919).

C17.5. SECURITY ASSISTANCE DISCREPANCY REPORTS

[Intervening text not shown]

C17.5.6. Frustrated Shipments Located at the Freight Forwarder.

1 The Security 

Assistance customer will report packaging and documentation discrepancies causing materiel 

to be frustrated at the freight forwarder location. Shipments frustrated at the freight 

forwarder's location due to packaging or documentation discrepancies attributed to the 

shipper may be submitted regardless of dollar value. Validated SDRs may directreturn, 

disposal, repackaging with reimbursement of actual repackaging costs, or other action, as

deemed appropriate by the item manager. Note that repackaging by the freight forwarder or a 

third party contracted by the freight forwarderis an optional approach to resolve the 

packaging discrepancy. The customer may request alternative action by the item manager if 

the SDR reply does not provide an acceptable solution for the customer. An estimated cost for 

repackaging may be requested prior to authorizing repackaging except for shipments below 

the FMS dollar threshold as the cost of obtaining an estimate may exceed the value of the 

shipment. In addition to the customer’s requested action, the ILCO and owner/manager will 

consider the estimated cost for corrective action prior to determining the most appropriate 

approach for resolution. When the estimated cost exceeds the value of the shipment, the 

burden for corrective action must fall on the owner/manager and must not be delegated to the 

FMS customer/freight forwarder. This will eliminate the potential for credit reimbursement 

for repackaging to exceed the value of the original purchase of the materiel. When applicable,

transactional exchange to support reimbursement for repackaging costs will follow normal 

procedures with additional steps as follows:

C17.5.6.1. Submitter creation of the SDR requesting disposition instructions. Use 

Action Code 2A and include estimated repackaging cost when available. If the materiel 

requires immediate repackaging (e.g., due to leakage) or if materiel cannot be returned to 

shipper in current condition without incurring repackaging costs, include this information in 

the SDR remarks and provide supporting evidence. The submitter must not employ a third 

party to provide a repackaging estimate if the shipment is valued below $200.

 1 Refer to ADC 1203.
ADC 1203, Enclosure 1

Page 3

C17.5.6.2. Shipping activity transmission of an interim reply, when applicable, to 

validate the discrepancy and recommend credit using Reply Code 525. The shipping activity 

will forward the SDR to the item manager. This SDR reply will include the applicable 300-

series forwarding reply code and a copy will be provided to the submitter.

C17.5.6.3. Item manager transmission of a final reply indicating planned 

resolution. The item manager may provide an interim reply either requesting a repackaging 

estimate if not already provided or authorizing repackaging by the freight forwarded (inclusive 

of a third party engaged by the freight forwarderto perform repacking and certification),

when this action is acceptable to the customer. Authorization for repacking by the freight 

forwarderwith subsequent reimbursement by the Government is only authorized once the 

owner/manager and the ILCO have determined this to be the most appropriate and cost 

effective resolution and reimbursement will not exceed the value of the purchase. This interim 

reply will include SDR Reply Code 131 and reply codes indicating additional information is 

required (Reply Code 104) and that no credit will be provided without evidence of actual 

repackaging cost (Reply Code 129). 

C17.5.6.4. Submitter creation of an SDR correction to the owner manager upon 

completion of the repackaging including the actual repackaging cost and supporting 

documentation (e.g. invoice for repackaging). Other data content may be perpetuated from 

the original submission.

C17.5.6.5. Item manager review of documentation to validate repackaging costs 

and transmission of final reply authorizing credit using Reply Code 109. If there is a 

substantial difference between the estimated and actual repackaging cost, the item manager 

will consider further review to validate the claim and may request clarification for the 

difference. The item manager will provide credit in accordance with MILSBILLS procedures 

in DLM 4000.25, Volume 4, Finance.

--------

B. Revise DLM 4000.25, DLMS, Volume 4, Chapter 2, Billing Procedures, as shown.

C2.6. BILLING FOR ACCESSORIAL AND ADMINISTRATIVE COSTS

[Intervening text not shown]

C2.6.1.4. Packing, Crating, Handling, and Transportation (PCH&T)

C2.6.1.4.1. Reimbursements for PCH&T costs for (a) IMM/ICP directed lateral 

redistributions, (b) IMM/ICP authorized MRP and sales returns, and (c) IMM/ICP directed 

procurement offset returns associated with In-Storage Visibility (ISV) will be a percent of the 

materiel credit price. The rate will be 3.5 percent for consumable items and 1 percent for 

reparable items. Billing offices will use the Accessorial and Other Miscellaneous Billings record 

format to support these billings and reimbursements.

C2.6.1.4.2. Reimbursements for transportation costs for (a) IMM/ICP directed 

lateral redistributions, (b) IMM/ICP authorized MRP and sales returns, and (c) IMM/ICP 
ADC 1203, Enclosure 1

Page 4

directed procurement offset returns associated with ISV will be for an amount equal to the 

IMM/ICP’s cost recovery rate for second destination transportation included in the selling price 

of the materiel and will be supported by a Billing for Transportation record format.

C2.6.1.4.3. Billing offices will use the Accessorial and Other Miscellaneous 

Billings to support reimbursements for authorized repackaging based upon a validated Supply 

Discrepancy Report under Volume 2, Chapter 17.1

C2.6.1.4.4. Billing offices will use the Accessorial and Other Miscellaneous 

Billings or other appropriate record to support billings and reimbursements for other authorized 

PCH&T, administrative, or accessorial charges. 

C2.6.1.4.5. Reimbursement for PCH&T will not be provided for materiel 

returns to DLA industrial sites under BRAC SS&D/IMSP, or NIMS sites. Refer to C2.2.2.4.

-------------------

1 Refer to ADC 1203
ADC 1203, Enclosure 2

Page 1

Enclosure 2, DLM Appendix Updates

Revise DLM 4000.25, Volume 2, Appendix 7.28, Supply Discrepancy Report Relevant Data 

Elements, as shown. 

AP7.28.4 Discrepancy Status or Disposition (Reply) Codes

[Intervening text not shown]

The 100-series codes provide status of financial resolution, materiel disposition instructions, or 

other appropriate information:

[Intervening text not shown]

101 Credit authorized by SoS source of supply/item manager.

102 Credit not authorized; see remarks.

109 Credit authorized by source of supply/item manager for repackaging costs.2

[Intervening text not shown]

131 Remark/repackage materiel and place in stock.

[Intervening text not shown]

The 500-series (and some 100-series) codes indicate an interim reply: 

103 Discrepancy report receipt acknowledgment. 

104 Additional clarification information required from submitter; see remarks.

[Intervening text not shown]

The 900-series codes are intended for system/application use in processing transactions. When 

SDRs are processed manually, these codes may be user assigned as appropriate:

919 Transaction rejected. Invalid Security Assistance materiel location code.2 

 2 Refer to ADC 1203. 2 Ibid.
ADC 1203, Enclosure 3

Page 1

Enclosure 3, DLMS Implementation Conventions (ICs)

Revise the DLMS 842A/W and 842A/R ICs for administrative updates as follows:

# Location Change Table for 

842A/W Standard SDR, Follow-up, Correction, 

Cancellation, & Reconsideration Request

Reason

1. DLMS 

Introductory 

Note

Add ADC 1203 to list of DLMS changes in the DLMS IC introductory 

note: 

- ADC 1203, SDR Procedures for Packaging Discrepancies at FMS 

Freight Forwarder or Component Retail/Tactical Level Activities

including Estimated/Actual Repackaging Cost

To identify DLMS 

changes included in 

the DLMS.

2. 2/REF01/2600 Revise DLMS note for existing Qualifier M1.

M1 Material Storage Location 

DLMS Note:

Use on SA SDR to identify the storage location where the discrepant 

materiel is being held. This information is needed to calculate a 

transportation reimbursement to the customer, if applicable and 

provide adequate disposition instructions for the return of materiel. 

Material Storage Location is not applicable for non-receipts. Cite 

one of the listed codes in the REF02. Refer to ADC 1203.

USG for U.S. Government Facility

ICD for In-Country Depot

FFD for Freight Forwarder

CON for Contractor Facility

Updated to include 

code values.

3. 2/AMT01/2730 Revise DLMS note for existing Qualifier RPC.

RPC Repackaging Cost 

DLMS Note:

1. Use to include the dollar value for corrective action. Include 

materiel and labor needed to complete a packing, packaging, 

preservation, palletization and/or marking project. Cost may be 

estimated when submitting the SDR for disposition instructions. Cost 

must be actual when submitting the SDR for reimbursement of 

corrective action already taken. 

2. Use with Estimated/Actual Cost Flag (AMT03) and specify in 

SDR remarks if repackaging cost is estimated or actual pending 

DoD-wide implementation of ADC 1203. See ADC 282A.

3. For RPC: WebSDR field length = 12 7

Updated to include 

additional guidance.

Field length revised 

to match length 

identified for the 

reply transaction 

(for consistency).
ADC 1203, Enclosure 3

Page 2

# Location Change Table for 

842A/W Standard SDR, Follow-up, Correction, 

Cancellation, & Reconsideration Request

Reason

4. 2/AMT03/2730 Open AMT03 and add new Qualifiers A and E with associated DLMS 

notes.

Credit/Debit Flag Code

DLMS Note: 

Use to identify the Estimated/Actual Cost Flag when requesting 

credit for repackaging cost. Must use only with Code RPC 

(Repackaging Cost). Refer to ADC 1203.

A Actual 

DLMS Note:

1. Use to indicate that the dollar amount provided represents the 

actual cost. 

2. Local code A is established for use in 842A/W Version 4030. A 

data maintenance action will be submitted to establish this code in a 

future version of the X12 standard.

E Estimated 

DLMS Note:

1. Use to indicate that the dollar amount provided represents an 

estimated cost.

2. Local code E is established for use in 842A/W Version 4030. A 

data maintenance action will be submitted to establish this code in a 

future version of the X12 standard.

Establishes 

methodology to 

distinguish 

estimated versus 

actual cost. 

Components 

systems must retain 

visibility of both 

estimated and actual 

costs as separate 

data field to retain 

an audit history. 
ADC 1203, Enclosure 3

Page 3

# Location Change Table for 

842A/R Standard SDR Reply

Reason

1. DLMS 

Introductory 

Note

Add ADC 1203 to DLMS Introductory note: 

- ADC 1203, SDR Procedures for Packaging Discrepancies at FMS 

Freight Forwarder or Component Retail/Tactical Level Activities

including Estimated/Actual Repackaging Cost

To identify 

DLMS changes 

included in the 

DLMS.

2. 2/AMT01/2730 Revise DLMS note for existing Qualifier RPC.

RPC Repackaging Cost 

DLMS Note:

1. Use to indicate the estimated dollar value for corrective action. 

Include materiel and labor needed to complete a packing, packaging, 

preservation, palletization and/or marking project. 

2. Use with Estimated/Actual Cost Flag (AMT03). Refer to ADC 1203.

3. For RPC: WebSDR field length = 7

Updated to 

include 

additional 

guidance.

3. 2/AMT03/2730 Open AMT03 and add new Qualifiers A and E with associated DLMS 

notes.

Credit/Debit Flag Code

DLMS Note: 

1. Use to identify the Estimated/Actual Cost Flag indicating the 

submitter’s request for credit was based upon estimated or actual 

repackaging cost. Use only with Code RPC (Repackaging Cost). 

2. May be used in interim and final SDR reply (e.g., interim reply may 

be based upon an estimate, while the final reply may be based upon 

actual cost). Refer to PDC 1203.

A Actual 

DLMS Note:

1. Use to indicate that the dollar amount provided represents the 

actual cost. 

2. Local code A is established for use in 842A/W Version 4030. A data 

maintenance action will be submitted for establishment of this code in 

a future version of the X12 standard.

E Estimated 

DLMS Note:

1. Use to indicate that the dollar amount provided represents an 

estimated cost.

2. Local code E is established for use in 842A/W Version 4030. A data 

maintenance action will be submitted to establish this code in a future 

version of the X12 standard.

Establishes 

methodology to 

distinguish 

estimated versus 

actual cost. 

Components 

systems must 

retain visibility 

of both 

estimated and 

actual costs as 

separate data 

field to retain an 

audit history. 
ADC 1203 Enclosure 4

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 Enclosure 4, Flow Diagrams
ADC 1203 Enclosure 4

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